Key Post PRSI and planning retirement

S class said:
He can set up a PRSA. This is relatively easy. If he contacts a broker they would set this up for him. There are a few brokers who regularly post here.
Search for G Sheehy or LD Ferguson or LA Brokers.

He would make pension contributions to the PRSA and then when he retires he can take 25% of his PRSA as a tax free lump sum and the remainder is then used to set up the ARF.

This might sound complicated, but is very straightforward.

One of the above brokers would do all the setting up.

Do a Google search for PRSAs to get some more information.

It would be well worthwhile if he wants up get extra Prsi contributions without the hassle of remaining in employment after age 66.
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Am I right in saying that if he's in a position to set up a PRSA before end-October 2024 by paying in a lump sum then he could claim his opening contribution against his 2023 tax liability so would get a tax refund? If so, then that's another reason to do it!
 
Yes he could do that.
With a relatively small amount of setting up, he could save himself some money and also get his required Prsi shortfall.
 
S class said:

Changes to the State Pension (Contributory) in Ireland

Changes to the State Pension including access to pensions for long-term carers
www.gov.ie www.gov.ie

However a maximum of 520 credits are reckonable when using the TCA calculation method.

If Home Caring Periods are involved a maximum of 20 years of reckonable credits are allowed.

There is no mention of a limit of 520 reckonable credits when using the Averaging calculation. Maybe the limit applies or maybe not ?

How to calculate your State Pension (Contributory) rate

How to calculate your State Pension (Contributory) rate using the Contribution Statement available on MyWelfare
www.gov.ie www.gov.ie
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There is no limit for the use of reckonable credits when using the average calculation. In theory you can have 520 contributions and all the rest credits to get the full pension.
 
Forumuser said:
There is no limit for the use of reckonable credits when using the average calculation. In theory you can have 520 contributions and all the rest credits to get the full pension.
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Must the 520 contributions be paid, class A or could a combination of 7 years paid and 3 years credited count to gain the 520 requirement for contributory pension.
 
If you get 1 class A stamp, this will convert your class D for your retirement year and the previuos year to class A credits.

You only need to work for a few hours and earn a minimum of 38 euro to get your class A stamp.

You should sign on for Jobseekers credits immediately after your class A employment up to age 66. This will gain you some more class A credits.
 
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S class said:
If you get 1 class A stamp, this will convert your class D for your retirement year and the previous year to class A credits.
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The table below is an extract from my wife's PRSI record.

In August 2004 she resigned her teaching job and didn't have any further employment until Spring 2005 when she did 9 weeks of substitute teaching.

From what you have written above and from my reading of the Social Welfare Operational Instructions, my understanding is that she will be entitled to change of status credits for contributory state pension purposes. Do you agree, please?

If my understanding is correct, this would mean that she would get change of status credits both for the 12 week period in 2005 before she took up employment AND for all of the previous tax year - even though she paid Class D PRSI for 36 weeks of that year?

Am I correct, or am I missing something obvious, please?

2001​
52 D​
2002​
52 D​
2003​
52 D​
2004​
36 D​
2005​
9 A, 4 J​
2006​
6 A​
 
In my case I ceased Class D employment on 31 December 2013.
Back then I didn't have much knowledge of the Prsi rules.
I delayed seeking class A employment until mid way through 2014.
I worked for 2 weeks and then signed on for credits. So for 2014 I had 2 class A paid and 28 credits. I had 22 weeks unemployed where no Prsi applied.

I presumed I would have 52 change of status credits for 2013 and 30 contributions for 2014 (28 credits and 2 paid).

I got 52 change of status for 2013 as I expected.

However when my Contributory Pension was calculated by DSP I received 52 contributions for 2014 (50 credits and 2 paid).

Basically the gap where I should have had no contributions was filled by change of status credits.

I am only guessing, but it would seem correct then that your wife should get 52 contributions for 2004. (to fill the gap where she had no contributions).

Also it would seem correct that the 12 week gap in 2005 would also be filled.

Did she sign on for Jobseekers credits for the remainder of 2005 ?

If she didn't maybe the gap up to the end of 2005 might also be filled with change of status credits.
 
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Thanks for that.

Unfortunately, back then we didn't have much understanding of the complexity of the Social Welfare system so were completely unaware of the future value of signing on for Jobseekers credits so she didn't sign on. However, if she does get those change of status credits, they'll push her yearly average up from the 10-14 Band to the 15-20 Band, which would mean an extra €70-odd a week to her.
 
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Yes, a few contributions short in the averaging calculation can have a drastic effect.
She just needs to reach average 14.5 to qualify for the 15-20 band. Hopefully it works out okay for her.
 
S class said:
So far there is no change to the rules for voluntary Prsi.
It stops when you reach age 66.
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The rules have changed recently.
Voluntary Prsi can now be paid up to age 70.


A person under the age of 66,, or in the case of a person born on or after 1 January 1958 who is aged between 66 and 70 years and has not been awarded the State Pension (Contributory), who ceases to be covered by compulsory PRSI may opt to become a Voluntary Contributor, provided certain conditions are satisfied.
 
I would be very grateful if you could throw some light on my situation. I am already on a contributory pension which was calculated using the Long Average method.My pension was calculated over 49 years. I was awarded Home Caring periods but they were not used in the calculation. I was averaged at 28 .75 years and get €236pw. I was not originally granted Homemakers credits which I applied for last week and was granted 3 years. Does this mean that my calculation will now be averaged over 46 years?
 
Yes you could be now averaged over 46 years. Although it could be more than 46 as only full calender years where you were a home carer are counted
This might or might not improve your rate of pension payment
 
Fiddlybits said:
I would be very grateful if you could throw some light on my situation. I am already on a contributory pension which was calculated using the Long Average method.My pension was calculated over 49 years. I was awarded Home Caring periods but they were not used in the calculation. I was averaged at 28 .75 years and get €236pw. I was not originally granted Homemakers credits which I applied for last week and was granted 3 years. Does this mean that my calculation will now be averaged over 46 yea8
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S class said:
Yes you could be now averaged over 46 years. Although it could be more than 46 as only full calender years where you were a home carer are counted
This might or might not improve your rate of pension payment
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Thank you S class for the reply. I’m not sure as they might give me the 3 years or 2 as I had 8 stamps in one of the years… Hopefully I will hear from the pension department soon. I think my average will come up to 29.3 which is not enough to get an increase in my pension. I will keep you posted
 
Fiddlybits said:
I’m not sure as they might give me the 3 years or 2 as I had 8 stamps in one of the years… Hopefully I will hear from the pension department soon. I think my average will come up to 29.3 which is not enough to get an increase in my pension. I will keep you posted
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Don't abandon hope!

By my reckoning, DSP will reduce your number of contribution years by the two complete Homemaker years [from 49 to 47] and give you 44 credits in respect of the incomplete Homemaker year.

You wrote that your average would "come up to 29.3" which leads me to suspect that you have about 1,348 reckonable contributions? If so, and if we add the 44 credits to 1348 and divide the total by 47, the result is 29.6 which would be enough to move you up to the next band!
 
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Marsupial said:
Don't abandon hope!

By my reckoning, DSP will reduce your number of contribution years by the two complete Homemaker years [from 49 to 47] and give you 44 credits in respect of the incomplete Homemaker year.

You wrote that your average would "come up to 29.3" which leads me to suspect that you have about 1,348 reckonable contributions? If so, and if we add the 44 credits to 1348 and divide the total by 47, the result is 29.6 which would be enough to move you up to the next band!
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Still hopeful
 
I'm aged 51 with no ARF or rental Income(I could use rent a room scheme). I'm hoping to spend 6 months of each year abroad. I plan to work in Ireland for 6 months each year. Paye. Agency employment.
I would work one block of 16 weeks making contributions in 5 different months. Eg. Last week of may. June. July. August. First week of September.
I'd work 2 more 6 week blocks contributing over 3 months each time. Eg last week January. February and first week march.

So I would have contributed 11 months each year. Would this be enough contributions towards pension. I'd be earning about 40k before tax.
Also if I decided to just work less. Only contributed over 7/8 months. Would I have enough contributions.
Apologies if I posted this on wrong thread. TIA
 
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